Left Navigation Lower

You are here

Brendan Fischer of the Center for Media and Democracy's PR Watch examines the ties between HB 282, the people behind it, and how it evolved into a threat to connectivity and local control. Brendan gave us permission to repost the story in full here. Since authoring this story, HB 282 was defeated in Georgia in a floor House vote. However, understanding where these bill comes from is critical, so we still wanted to run this piece.

Community-Owned Internet, Long Targeted by ALEC and Big Telecom, Under Fire in Georgia

Members of the American Legislative Exchange Council (ALEC) in the Georgia Legislature are pushing a bill to thwart locally-owned internet in underserved communities, an industry-sponsored effort that effectively reinforces the digital divide. A vote in the Georgia Assembly is scheduled for Thursday, March 7; if Georgia passes the bill it would be the twentieth state to eliminate community control over internet access.

Rural and Poor Communities Take Control of Internet

As many as one in ten Americans cannot get internet connections that are fast enough for basic activities like streaming video or file sharing, largely because big internet providers like AT&T and Time Warner Cable have refused to provide adequate service to communities where the population is too dispersed or too poor. As local economies become ever more dependent on internet access, though, this digital divide is leaving rural and low-income communities in the dust.

But local governments in places like Wilson, North Carolina and Thomasville, Georgia have taken matters into their own hands: they've built publicly owned high-speed internet to keep their communities viable in the 21st Century. These efforts have created jobs and helped save local economies, with businesses that rely on digital communication remaining in, or relocating to, the newly wired communities.

Competition from these locally owned providers has irritated the big "incumbent" internet companies, which had managed to put-off upgrading their networks because of near-monopoly power in many areas. Municipal broadband -- which in many cases offers faster internet at a lower price -- "forces companies to invest in their own infrastructure because communities are doing it better," says Catharine Rice, President of the SouthEast Association of Telecommunications Officers and Advisors (SEATOA).

Instead of responding to competition with improved services, the industry has responded by pushing a raft of bills to crush community and local broadband.

"It is cheaper to hire a lobbyist and push a bill than invest in infrastructure," Rice told the Center for Media and Democracy.

Georgia's HB 282 would prohibit cities from offering broadband to areas where just one home in a census block has internet speed above 3 Mbps. But 3Mbps is exceptionally slow. Businesses would likely be unable to upload a powerpoint presentation, doctors could not do medical file sharing or remote diagnosis, students could not access virtual education, and users could not access video on demand -- all of which is important for rural areas to remain competitive with the rest of the country, not to mention the world.

Since at least 2001 ALEC has been a conduit for internet providers like AT&T and Time Warner Cable to eliminate competition. As Bloomberg Business Weekhas described, the bill that became the Municipal Telecommunications Private Industry Safeguards Act was largely drafted by AT&T and other big internet providers, and was first passed in Utah in 2001, after the city of Provo created a municipal broadband system. The following summer, the bill was brought to ALEC’s Annual Meeting in Orlando and adopted as a “model” by the ALEC Telecommunications & Information Technology Task Force.

It passed most recently in North Carolina, where the exceptionally successful “Greenlight” program in Wilson had prompted incumbent internet providers like AT&T, CenturyLink, and Time Warner Cable to push the legislation starting in 2006. The bill had failed in previous sessions, but after control of the legislature shifted to Republicans in the 2010 elections and big telecom providers gave nearly $1.6 million in campaign contributions to North Carolina legislators over a five-year period, it finally became law in 2011.

In addition to campaign contributions and payments to ALEC, big internet providers have influenced legislators with valuable gifts. For example, AT&T was the second-highest contributor to the ALEC “scholarship” fund that pays for legislators’ flights and hotel rooms to ALEC meetings – a scheme that creates an environment for improper influence and would appear to violate many states’ ethics and lobbying laws. ALEC meetings are often held in fun cities like New Orleans and at swank hotels, and because state legislators earn, on average, about $46,000 a year, these destinations and resorts would otherwise be unaffordable.

Nationally, AT&T gave $90,000 to the scholarship fund over a three-year period (2006-2008, the only years for which complete information is available). The legislators who are sponsoring the current bill before the Georgia legislature are major recipients of ALEC scholarships. Bill sponsor Representative Don Parsons, who is an active member of the ALEC Telecommunications & Information Technology Task Force, received $5735.48 over those three years, and Representative Ben Harbin received $3546.08 over two years. HB 282 sponsor Representative Mark Hamilton received $3527.80 in "scholarships" in 2008 alone.

As a further incentive to attend ALEC meetings, elected officials are encouraged to bring their families and offered subsidized childcare and activities for kids six months and older, which they call "Kid's Congress." Time Warner Cable sponsored "Kid's Congress" at ALEC's 2011 Annual Meeting. At the April 2011 meeting, Time Warner Cable invited legislators to an exclusive party box at a Cincinnatti Reds baseball game, with food and drink provided.

If a lobbyist wants to contact a legislator within a state and make their views known, they have their ear for perhaps 15 minutes. They also have to register and report the time and expenditures. But through ALEC, corporate interests can access legislators for three days of meetings, workshops, and parties, where elected officials are basically a captive audience -- and where they know who is footing the bill.

2012 Bill Defeated, Thanks to Business Opposition

Georgia first saw anti-municipal broadband legislation in 2012. That bill was introduced by then-Senator Chip Rogers (R), who was the ALEC State Chair for Georgia (until his retirement in December) and the winner of the 2011 “State Chair of the Year” award.

Sen. Rogers' bill was nearly a word-for-word duplication of what had passed in North Carolina. The bill had the support of the Georgia chapter of the U.S. Chamber of Commerce, says Lou Comer, Director of Local Government Services at the Georgia Municipal Association, but Georgia businesses rallied against it.

Municipalities reached out to businesses in their communities, who then contacted their legislators to express opposition to the bill. "The businesses made it clear that 'we are getting good service'," Comer said. If municipal broadband were eliminated these companies would have no choice but to return to the high-cost, low-speed internet offered by the incumbent providers, she said.

The big internet providers framed their opposition to municipal broadband in free market terms: the public sector interfering with the private sector, and taxpayer money being "wasted" because municipal projects supposedly are unsuccessful -- the notion that private industry always does things better than government.

SEATOA's Rice doubts their motives. "Do these multi-billion dollar companies really care about community tax payers?" No, she says: "They care about their bottom line and profit margins."

If, as the industry alleges, municipal broadband projects are going to fail, the incumbent providers would have nothing to worry about. But according to Rice, "they are pushing these laws because they know [municipal broadband projects] don’t fail."

Thomasville, Georgia, for example, built its broadband 14 years ago and has been so successful that local officials have actually eliminated property taxes. Contrary to the industry claim that these projects cost taxpayers money, residents in this community are actually paying less tax.

Municipalities are "all about the private sector because we need them for economic development,” said the Georgia Municipal Association's Comer, noting that many of the rural communities that have built municipal broadband are solidly Republican.

"If the private sector would have come in and provided these services, [the municipalities] never would have needed to build their broadband projects," she said. "They had to do it to save their communities."

Georgia Bill is Back

Georgia's legislation may have been defeated in 2012 but a version is back again in 2013.

“We are not second class citizens because we decided to live in rural Georgia,” said Elberton, Georgia Mayor Larry Guest in testimony opposing the legislation.

“Georgia should be promoting a pro-business, inclusive approach to broadband deployment, especially in rural areas of the state,” he said.

The bill is again being opposed by businesses in the state, as well as tech companies like Google and Alcatel-Lucent, who argue that the private sector alone cannot build the nation's public infrastructure. Their letter to Rep. Bill Parsons also notes the recent goal outlined by the Federal Communications Commission (FCC) to offer one gigabit access nationwide by 2015.

HB282 has been modified from the 2012 version to exempt some existing broadband projects -- perhaps to neuter opposition from businesses already benefitting from municipal broadband -- but it still creates onerous burdens and thwarts new projects, perhaps even including those already underway.

"Other Georgia cities deserve the right to do what Elberton did, and their residents deserve the services Cumming has,” Mayor Guest said, referring to two communities that have municipal broadband projects.

“Competition ensures market-based pricing and faster delivery of state-of-the-art services. We have to do everything we can to attract jobs. If we don’t do that, business will not select rural Georgia. High speed access is essential to us.”

Feeds

Random Quote

I therefore lay down the following principle: That where a community--a city or county or a district--is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service.

That right has been recognized in a good many of the States of the Union. Its general recognition by every State will hasten the day of better service and lower rates. It is perfectly clear to me, and to every thinking citizen, that no community which is sure that it is now being served well, and at reasonable rates by a private utility company, will seek to build or operate its own plant. But on the other hand the very fact that a community can, by vote of the electorate, create a yardstick of its own, will, in most cases, guarantee good service and low rates to its population. I might call the right of the people to own and operate their own utility something like this: a "birch rod" in the cupboard to be taken out and used only when the "child" gets beyond the point where a mere scolding does no good.